The Works activist investor hits back at retailer’s ‘absurd’ claims
The activist investor seeking to gain a seat on the board at The Works has hit back at the discount retailer’s “absurd” claims the move would undermine its growth plans.
Kelso, an activist investor, has criticised the AIM-listed retailer for urging shareholders to block its attempt to install retired private equity partner Graeme Coulthard as a director.
John Goold, chief executive of the London-listed investment firm, told Morning Wire: “Kelso believes that Graeme Coulthard would be a great addition to the board of The Works and we are disappointed by the board’s reaction.”
The Works, a high street retailer which sells toys, arts and crafts, warned on Thursday that the appointment could “create unnecessary distraction [and] risk derailing” the board’s growth strategy.
The group also raised concerns over Coulthard’s expertise, saying he “has limited experience as a director of a listed company and no executive experience in multi-site value retail operations”.
The Works said it told Kelso that this move would “not be in the best interests of the company or its stakeholders and would be more likely to undermine, rather than enhance, long-term value creation.”
However, Kelso has refused to withdraw its request and has demanded shareholders appoint Coulthard at its annual general meeting next month.
Kelso slams ‘misleading’ claims
“We think it is misleading of the board to suggest to shareholders that Graeme has no direct relevant experience in value multi-site retailing given his significant experience as a director of the Card Factory between 2010 and 2015 where he helped create very significant value for the owner Charterhouse Capital Partners,” Goold told Morning Wire.
“The idea of the claim by the board that Graeme Coulthard will undermine value creation rather than enhance it is also absurd in our view.”
The Works has urged its investors to slap down the play, but Kelso will set out its argument for the appointment on Friday in a statement to shareholders, Morning Wire understands.
Coulthard, who owns eight per cent of The Works, served as a partner at London-based private equity firm Charterhouse for 19 years, before his retirement in 2017.
Kelso pushed for new chair
This is not the first time that Kelso has pushed for control over The Works.
In 2024, Goold and the activist investor’s finance chief, Mark Kirkland, gained seats on the retailer’s board.
They pushed for the removal of The Work’s then-chair and orchestrated the appointment of her successor, Stephen Bellamy, according to a source familiar with the matter. The pair quit the board in October 2024.
Kelso has a 10 per cent stake in The Works, making it the retailer’s third-biggest shareholder.
The Work’s shares fell by more than five per cent on Thursday, to 88p, after the group published its broadside against the activist investor.
In February this year, the retailer’s share price spiked after Kelso upped its stake in the firm, which it dubbed “one of the most undervalued companies on the UK stock market”.
Under the leadership of chief executive Gavin Peck, The Works has been attempting to overturn its reputation as a ‘pile ‘em high, sell ‘em cheap’ discounter, by leaning into screen-free entertainment for children in an appeal to British parents.
Kelso is supportive of Peck’s leadership strategy and his position as chief executive, it is understood.
The retailer posted 3.3 per cent sales growth and £260m in revenue in the year to May, pushing adjusted profit up 44 per cent to £7.2m.
The Works was contacted for comment.